Referendum to be held on European fiscal compact

[Charlie Darwin]

Stealing:
At the height of the boom the biggest earners paid a maximum tax rate of 12.5% while the likes of us paid 20% on a good day.

Huh? People at the top weren't taxed heavily enough but these figures are nonsense.

[John83]

Yes, I presume he's referring to the corporation tax. There are all kinds of crappy loopholes at the top though: get paid in shares, borrow against the asset for cash, and how much tax do you really pay? Even when you cash in on them, you only pay 30%.

[Charlie Darwin]

Yes, I presume he's referring to the corporation tax. There are all kinds of crappy loopholes at the top though: get paid in shares, borrow against the asset for cash, and how much tax do you really pay? Even when you cash in on them, you only pay 30%.

There are loopholes for individuals (not as many as people think), but people with large incomes are actually taxed quite heavily in this state. The Irish tax system is actually very steeply progressive considering what a low base it starts from. People in the middle get hammered, obviously, but the marginal rate does keep going up.

[If anyone read my second paragraph there, don't mind me. I was talking nonsense.]

[John83]

There are loopholes for individuals (not as many as people think), but people with large incomes are actually taxed quite heavily in this state. The Irish tax system is actually very steeply progressive considering what a low base it starts from. People in the middle get hammered, obviously, but the marginal rate does keep going up.

[If anyone read my second paragraph there, don't mind me. I was talking nonsense.]

Yeah, I've read that too, in several articles over quite some time. I find it hilarious that it's always the top x% earners pay X% of the tax, but it's never said what percentage of the total income they are paid.

Furthermore, there's been this bull about "broadening the tax base" recently, which seems to be Duckspeak for "introduce more regressive taxation".

[pineapple stu]

There are all kinds of crappy loopholes at the top though [...] and how much tax do you really pay?

Ask Peewee Flynn maybe?

However, the notion that the rich pay no tax is nonsense. You can see that here (go into the year of your choice, and then Income Distribution Statistics). In 2009, for example, 0.26% of PAYE workers earned E275k or more (table IDS5). They earned 4.08% of all the income that PAYE workers earned, and paid 10.83% of all PAYE tax. They paid an average effective tax rate of 34% (this isn't stated as such in the report, but you can work it out by dividing total tax by total pay). The average industrial wage (around E700 per week - let's call it E35k per year); people there paid an average effective tax rate of 5½% (obviously a married couple on E35k between them would have twice the tax credits, which will reduce their tax bill a fair amount).

In 2004 - a year at the height of the boom, as born2bwild suggested - 0.17% of PAYE workers earned more than E275k. They earned 2.70% of all PAYE income, and paid 5.89% of all PAYE tax - an average effective tax rate of 33%. Meanwhile, those on E35k paid an average effective tax rate of 11%.

So not only is it not true that the high earners are paying less tax, but the between 2004 and 2009, it was the low earners are the ones who gained from new tax legislation - widened tax credit and standard bands mainly.

12½% - as others have noted - is the Corporation Tax rate and has nothing to do with personal tax rates. If the point is that companies pay less tax than people, well then the refutation is that without that tax rate, they maybe wouldn't be here at all.

So moving on to born2bwild's other points -

Borrowing by ordinary people wasn't at the core of what made this mess

It really, really was. Look at mortgage debt, how far it's gone up. Look at personal debt - car debt and credit card debt and general bank debt. E3bn in credit card debt?! E172bn in personal debt?! You think that isn't at the core of this mess? Maybe we were forced to all buy our boom-time house* rather than renting?

Nosiree, it was stealing and stupidity.

This is true, as noted above. Stupidity is E172bn of personal debt - E35k for every single person in the country, from newborn babies to pensioners who, you'd imagine, should be nicely cash-flush after a lifetime's hard working. Stealing is paying without paying. Racking up debt, in other words. And then maybe looking for to be let off.

Stealing:
At the height of the boom the biggest earners paid a maximum tax rate of 12.5% while the likes of us paid 20% on a good day.

Not true, as we've seen.

Stealing:
When it turned out that no-one would lend them money anymore because the banks' liabilities were about to drag the whole country under, FF, supported by every mainstream party in the country decided to guarantee those liabilities. This stealing is stealing from our children and their children.

The state and the people really aren't that separable. Why had the banks borrowed too much? Because we borrowed too much. I borrowed to buy nice and expensive things from you - expensive in part to pay your high wages. We're all responsible for this. Some more than others, sure, but the notion that this is all somehow someone else's fault and that I deserve all my money from the olden days is nonsense.

* - like me, before people start accusing me of being too smug

[John83]

However, the notion that the rich pay no tax is nonsense. You can see that here (go into the year of your choice, and then Income Distribution Statistics). In 2009, for example, 0.26% of PAYE workers earned E275k or more (table IDS5). They earned 4.08% of all the income that PAYE workers earned, and paid 10.83% of all PAYE tax. They paid an average effective tax rate of 34% (this isn't stated as such in the report, but you can work it out by dividing total tax by total pay). The average industrial wage (around E700 per week - let's call it E35k per year); people there paid an average effective tax rate of 5½% (obviously a married couple on E35k between them would have twice the tax credits, which will reduce their tax bill a fair amount).

That's PAYE - not really surprsing the numbers work out like that. Self-employed is where it's at. That, and - as I mentioned - salary and bonuses in shares, at reduced rates where required to avoid tax (not an Irish example, but Apple famously paid Steve $1 a year, plus a special category of stock). Thanks for finding that number though; as I said, I've read a number of newspaper reports which didn't.

[pineapple stu]

That's PAYE - not really surprsing the numbers work out like that. Self-employed is where it's at.

Self-employed numbers are in the same link - go to table IDS2 where, in 2009, 2.84% of self-employed people including proprietary directors earned E275k+. They paid 24.76% of all self-employed tax at an effective rate of 25.7%. So better than PAYE, but those on E35k also fared (marginally) better, with a 5.1% effective rate. I imagine part of the reduction is the fact that simply doing an Income Tax return means you're more likely to make claims for medical expenses, bin charges, charitable donations, etc. The figures, I think, are taken from Income Tax returns; don't know how they account for stuff like share payments, etc. But still, the rich aren't exactly getting away lightly here.

[John83]

Self-employed numbers are in the same link - go to table IDS2 where, in 2009, 2.84% of self-employed people including proprietary directors earned E275k+. They paid 24.76% of all self-employed tax at an effective rate of 25.7%. So better than PAYE, but those on E35k also fared (marginally) better, with a 5.1% effective rate. I imagine part of the reduction is the fact that simply doing an Income Tax return means you're more likely to make claims for medical expenses, bin charges, charitable donations, etc. The figures, I think, are taken from Income Tax returns; don't know how they account for stuff like share payments, etc. But still, the rich aren't exactly getting away lightly here.

It might look that way to you, but that 5% you quoted for 35k doesn't account for the cost of living. Pay rent, food and bills for a family of four and run a car (which can be a necessity for work) out of that, and tell me again why paying 26% of €250,000 is a relatively high tax rate.

[pineapple stu]

I know what you're saying alright, but I think - and I don't have any back-up on this, so I'll happily stand corrected - that high-value mortgages are disproportionately in trouble. People on high salaries just spend more. Getting into debt is how you make money, after all (I remember an old boss saying that the one thing he enjoyed more than spending money was spending someone else's money). So for right or for wrong, it's too simplistic to say "Sure E250k is loads of money; we'll just take all the tax off the high earners".

I've no particular problems with, say, tax takes going up a flat percentage rate across all tax bands. And the OP was saying not that 26% was too low, but that the high earners were paying close on half the rate that the low earners were paying. So I think I've refuted that.

[bennocelt]

This is true, as noted above. Stupidity is E172bn of personal debt - E35k for every single person in the country, from newborn babies to pensioners who, you'd imagine, should be nicely cash-flush after a lifetime's hard working. Stealing is paying without paying. Racking up debt, in other words. And then maybe looking for to be let off.

The state and the people really aren't that separable. Why had the banks borrowed too much? Because we borrowed too much. I borrowed to buy nice and expensive things from you - expensive in part to pay your high wages. We're all responsible for this. Some more than others, sure, but the notion that this is all somehow someone else's fault and that I deserve all my money from the olden days is nonsense.

Agree here, Ireland as a whole was rotten, and remember FF were voted in 3 times with everyone knowing full well how corrupt they were

[Charlie Darwin]

Yeah, I've read that too, in several articles over quite some time. I find it hilarious that it's always the top x% earners pay X% of the tax, but it's never said what percentage of the total income they are paid.

Furthermore, there's been this bull about "broadening the tax base" recently, which seems to be Duckspeak for "introduce more regressive taxation".

There is actually logic to it though. Broadening the tax base might just be a euphemism for desperately seeking money, but if we'd had a broader tax base to begin with the economy would have been able to weather the crash better.

The tax base is actually very strictly progressive, right up to the top of the ladder:

taxpaid.png
Source

[mypost]

You shouldn't accept it, although, to be honest, all that I'm doing is complaining and accepting it.

If they want my vote then I want at least the return of my 600eu.

I'm too tired after working 2 people's jobs and besides, I'm off to Tolka to do some stewarding.

Always good to do stewarding when you're not tired.

Just being tired is a nice complaint though. 15% of the nation don't have a job, and many of those have to try to find work elsewhere. That's what I call tiring, never mind stressful.

Everyone is responsible for the financial position the state is in. Some more than others, but the nation was one big credit card for 15 years, and is only now realising that the cash they borrowed has to be paid back. You're not going to get your €600pm back, but even if you did, it should have no bearing on your vote, one way or the other.

[Macy]

Agree here, Ireland as a whole was rotten, and remember FF were voted in 3 times with everyone knowing full well how corrupt they were

FF led governments haven't had more than 50% of the vote since the Spring tide FF-Labour coalition. The current Government is the first one since to have 50% plus of the vote. I like to blame the dumbass irish electorate as much as the next man, but the over use of 3 seaters means it's not that often that a Government has over 50% of the vote.

[bennocelt]

FF led governments haven't had more than 50% of the vote since the Spring tide FF-Labour coalition. The current Government is the first one since to have 50% plus of the vote. I like to blame the dumbass irish electorate as much as the next man, but the over use of 3 seaters means it's not that often that a Government has over 50% of the vote.

True but then thats democracy, and some moan and dont even bother to vote at all
plus fg are a lighter shade of ff, and voting for labour is a a joke as well

[born2bwild]

Ask Peewee Flynn maybe?

However, the notion that the rich pay no tax is nonsense. You can see that here (go into the year of your choice, and then Income Distribution Statistics). In 2009, for example, 0.26% of PAYE workers earned E275k or more (table IDS5). They earned 4.08% of all the income that PAYE workers earned, and paid 10.83% of all PAYE tax. They paid an average effective tax rate of 34% (this isn't stated as such in the report, but you can work it out by dividing total tax by total pay). The average industrial wage (around E700 per week - let's call it E35k per year); people there paid an average effective tax rate of 5½% (obviously a married couple on E35k between them would have twice the tax credits, which will reduce their tax bill a fair amount).

In 2004 - a year at the height of the boom, as born2bwild suggested - 0.17% of PAYE workers earned more than E275k. They earned 2.70% of all PAYE income, and paid 5.89% of all PAYE tax - an average effective tax rate of 33%. Meanwhile, those on E35k paid an average effective tax rate of 11%.

So not only is it not true that the high earners are paying less tax, but the between 2004 and 2009, it was the low earners are the ones who gained from new tax legislation - widened tax credit and standard bands mainly.

12½% - as others have noted - is the Corporation Tax rate and has nothing to do with personal tax rates. If the point is that companies pay less tax than people, well then the refutation is that without that tax rate, they maybe wouldn't be here at all.

The 12% corporate tax rate is precisely my point when I mentioned 'stealing'.

China has a corporation tax of 25%. The US has one of 39.5%. The Eurozone average is 30.4%

12.5% is stealing and we should increase it significantly. It falls to 9.6% when allowances, reliefs and exemptions are taken into account. The truth is we're living in a tax haven - according to the CSO's statistics on the repatriation of profits by multinationals over the period 1995 to 2007 there was an increase from 5 billion to nearly 30 billion per year. Of course, no matter how much pain gets inflicted on us we can never, ever compete with the Poles or Lithuanians in the race to the bottom that we, the Cayman Islands of the North Atlantic, have initiated with these economic policies.

Perhaps you might have a word with the straw man floating around in your head but my point was not that the rich pay no tax - my point is that the rich do not pay enough. And when I talk about 'rich' I do not mean 'high-paid' civil servants on 150,000-200,000 pa (although I fail to see why anyone should legally earn more than 150,000 pa) I mean the super rich -we have over eighteen thousand people with over 800,000 or more to spend (this wealth does not include the value of the family home).

So moving on to Pineapplestu's other points -

It really, really was. Look at mortgage debt, how far it's gone up. Look at personal debt - car debt and credit card debt and general bank debt. E3bn in credit card debt?!E172bn in personal debt?! You think that isn't at the core of this mess? Maybe we were forced to all buy our boom-time house* rather than renting?

It really, really wasn't. The ordinary people who borrowed to buy a home in an artificially inflated property market are not responsible for this mess. Wittingly or unwittingly the thrust of your argument is to apologise for an economic system that never had the best interests of the citizens of this republic anywhere near its list of priorities. People bought crazily-priced houses because they had to have somewhere to live - they bought overpriced health insurance because our health system was and is a mess, they bought cars, cars and more cars because our public transport system is a disgrace.

Meanwhile, citizens were encouraged to become mini-property speculators - according to the Department of the Environment's statistics on the Ownership Status of Borrowers property bought for investment ran at a rate almost double that of property bought to be lived in. These people are not 'ordinary people'. To make matters worse, landlords still get the dole in the form of Rent Supplement to the tune of 500million eu. Private landlords are being subsidised by me and you to prey on the poorest citizens of this republic.

This is true, as noted above. Stupidity is E172bn of personal debt - E35k for every single person in the country, from newborn babies to pensioners who, you'd imagine, should be nicely cash-flush after a lifetime's hard working. Stealing is paying without paying. Racking up debt, in other words. And then maybe looking for to be let off.


Not true, as we've seen.


The state and the people really aren't that separable. Why had the banks borrowed too much? Because we borrowed too much. I borrowed to buy nice and expensive things from you - expensive in part to pay your high wages. We're all responsible for this. Some more than others, sure, but the notion that this is all somehow someone else's fault and that I deserve all my money from the olden days is nonsense.

* - like me, before people start accusing me of being too smug

I think the difference between me and you is that you accept the neoliberal economic structures and ideologies that have ruined our society. I do not. You easily use 'we' when I see no 'we' - except when I'm watching the international football team. 'We' did not rack up the debt that has shamed and defiled this republic. I do not screw the state for rent supplement to support my investments. I did not default on my multi-billion euro investment loans to the banks - yet the job of actually keeping up my payments on my mortgage has been made very difficult because others did and the gombeen men from the tent at the Galway Races decided to hit me with the bill.

I do not accept the lies about keeping 'our' corporation tax at an effective rate of 9% (Google pays 3%!!!!!).

Actually, come to think of it, if the krauts do put an increase in that to the EU average on the table I might consider voting yes. Add on statutes prohibiting all state subsidies to private landlords, a means-tested property tax (put the Rottweilers from the dole fraud squad on the job), an personal income limit of 150,000 - 200, 000 and I'll warm to the idea even more.

And believe me, I feel far from smug.

[mypost]

It really, really wasn't. The ordinary people who borrowed to buy a home in an artificially inflated property market are not responsible for this mess. Wittingly or unwittingly the thrust of your argument is to apologise for an economic system that never had the best interests of the citizens of this republic anywhere near its list of priorities. People bought crazily-priced houses because they had to have somewhere to live - they bought overpriced health insurance because our health system was and is a mess, they bought cars, cars and more cars because our public transport system is a disgrace.

They bought homes in Sunny Beach, China, New Zealand etc, because Paddies are obsessed with buying and owning properties. They bought new cars every year, not because of the transport network, but because Paddy down the road bought his. They went to places in the Third World for their weddings. They went on shopping, solely shopping trips, to New York of all places. None of that was necessary. They don't go to New York now, they go to Newry, under the guise of "saving money". By the time they get there, they have lost all the cash they "saved" on the way.

I remember when the SSIA's matured, and everyone boasting what they would do with their cash. And most of it wasn't paying off debts or buying essentials. Even as the construction sector began to collapse, and house prices began to moderate, people continued spending cash on things they couldn't afford, while the elite who think the Sun shines out of Brussels, told everyone they see a "soft landing" and they "don't foresee" a crash. Even as far back as 2007, the warning signs were everywhere, but nobody paid any attention.

Everyone got it wrong, and now you can't look for €600 back per month to buy a vote.

[born2bwild]

They bought homes in Sunny Beach, China, New Zealand etc, because Paddies are obsessed with buying and owning properties. They bought new cars every year, not because of the transport network, but because Paddy down the road bought his. They went to places in the Third World for their weddings. They went on shopping, solely shopping trips, to New York of all places. None of that was necessary. They don't go to New York now, they go to Newry, under the guise of "saving money". By the time they get there, they have lost all the cash they "saved" on the way.

I remember when the SSIA's matured, and everyone boasting what they would do with their cash. And most of it wasn't paying off debts or buying essentials. Even as the construction sector began to collapse, and house prices began to moderate, people continued spending cash on things they couldn't afford, while the elite who think the Sun shines out of Brussels, told everyone they see a "soft landing" and they "don't foresee" a crash. Even as far back as 2007, the warning signs were everywhere, but nobody paid any attention.

Everyone got it wrong, and now everyone has to face up to their responsibilities, not look for €600 back per month to buy a vote.

Some people got it more wrong than others. Some people got it so wrong that the rest of us will be paying for their mistakes for the rest of our lives.

The cost of my vote is going up; it's not 600eu anymore - check my last post.

[pineapple stu]

I'm not going to address all your points, cos otherwise we'll just end up in one of those picky threads where every sentence is quoted and analysed and re-quoted and re-analysed and the posts mushroom way out of proportion. A couple of comments though -

The 12½% corporate tax rate is precisely my point when I mentioned 'stealing'.

China has a corporation tax of 25%. The US has one of 39.5%. The Eurozone average is 30.4%

Can you provide a link for that? Here's the Irish Times (granted, I've had problems with the Irish Times talking crap before) saying that the average eurozone rate is 21.8%. You say that for Ireland, this reduces to an effective rate of 9.6% (Finfacts.ie and the Irish Times both disagree, saying it's 11.9%) while France's is 8.2%. The World Bank seems to be the source, which should be reputable enough.

The problem, of course, is tax on bigger companies. And here we have a choice. We can either tax them at 12½% and make lots of money, or tax them at 20% and lose lots of money (compared to now). It comes down to elasticity in a way. Just because you double the rate doesn't mean you'll double the take. And companies being in Ireland for the tax rate means more jobs as well. Is it a race to the bottom? Quite possibly, yes. Does that mean it'd be a good thing to just double our CT rate for big companies and screw them over? No, it doesn't. We can't afford right now to lose lots of money, so increasing the tax rate would be a disaster.

Was the 12½% rate an error to begin with? Maybe. But it unquestionably boosted out economy and led to the extra E600 per month in your pocket. If you want rid of the rate, fair enough, but you can't have it both ways and say you want to keep the E600 a month as well. Ireland was always a poor, backwater, out of the way place (yes, the Brits robbing our natural resources didn't help, but still), and you can't take away the things that led us to grow and expect us to stay the same.

It really, really wasn't. The ordinary people who borrowed to buy a home in an artificially inflated property market are not responsible for this mess. People bought crazily-priced houses because they had to have somewhere to live - they bought overpriced health insurance because our health system was and is a mess, they bought cars, cars and more cars because our public transport system is a disgrace.

Nothing stopped people from renting instead of borrowing half a million to buy a shoebox in Meath (and that's before we get onto ordinary people borrowing more to buy second and third houses to make even more money). Nothing forced people to borrow to buy a new car every other year when before, they were happy with a six- or seven-year-old car. Absolutely the ordinary people are to blame to an extent. E176bn in personal debt, and you reckon that's nobody's fault? I absolutely agree that people were encouraged to buy - Eddie Hobbs, for example, should be shot, and rent subsidy is a disgrace which even now is keeping house prices artificially high - but you can't go fobbing off responsibility because the big bogeyman encouraged you to borrow.

a personal income limit of 150,000 - 200, 000 and I'll warm to the idea even more.

You're getting very much towards socialism here. I don't particularly have a problem with that - Cuba must be rolling around in laughter at the moment, and even North Korea are using us as an example to show the merits of their regime. But if that's the road you want to go down, then this referendum isn't really relevant. Vote socialist party (I have on occasion). Help get it to a stage where it's a majority party that can do something - that's the way the world has always worked. Make sure that if they start spouting utter nonsense about alternatives to austerity, that there are solid plans in place (and not just "For massive investment in jobs, housing, education and society instead of cuts! End the nightmare of youth unemployment!" - let's get out of debt by borrowing more! Yeah! Took our jobs!). And if you're going to propose dropping out of the euro (FWIW, I was never in favour of going in), make sure you're happy with the social effects of default and hyperinflation, cos they're not fun.

[mypost]

Some people got it more wrong than others. Some people got it so wrong that the rest of us will be paying for their mistakes for the rest of our lives.

Some people got it more wrong than others. But that doesn't mean the others can simply abdicate all responsibility.

[born2bwild]

[p]Yeah, pretty much, a workers' republic - anything else uncouples reward from work that contributes to the welfare of the whole society.

Capitalism is not working - 'returning to growth' 'returning to the markets' 'facing up to our responsibilities' - no amount of lies is going to change that basic fact.

Yup that Eddie Hobbs property porn clip has always annoyed me almost as much as people who refer to this republic as 'Ireland Inc'.

Any whiff of 'we' have to face up to 'our' responsibilities sends me into orbit, though:




....Plus ça change, plus c'est la même chose[/p]